What A Growth Scare Means For The Fed & Markets | Warren Pies
Episode publishedPodcast: Forward GuidanceForward Guidance
Transcript preview
Preview only
Scale is the blockchain that's truly built different. Forget gas fees and waiting. Scale offers a seamless web 3 experience of fast, fee free transactions. Whether it's gaming, AI, or next gen dApps, Scale is here to power your future. Explore more at scale.space/ecosystem and follow them on x at scale network. Hey, everyone. This episode is sponsored by Ledger. For the past decade, Ledger has been the global leader in digital asset security trusted to secure more than 20% of the world's crypto assets. Celebrating 10 years of innovation, Ledger is making digital ownership more secure and acces
Likewise. I I'm loving the new podcast. You're killing it, and, excited to be with you. Yeah,
man. Appreciate that a lot. Cool. Well, yeah, let's get right into things. We're in the new year, 2nd week of January, and would love to just hear a bit about how you're thinking about this year. You know, maybe we can focus on the nonfiscal, non Trump stuff first, and then obviously that's its own, you know, can of worms that we can get into in a bit. We'd just love to hear about how you're thinking about the economy, global macro, monetary policy, etcetera, as it stands right now.
Yeah. I'm gonna start, like, really big picture, and say our theme as we wrote our year ahead outlook was that we thought that 2025 was gonna be a year where the the theme was discovering neutral, or discovering where what the real nature of the economy is post pandemic. And so that's I I nothing has changed that even though we've had a lot of kind of policy and macro volatility even just in the months since we wrote our year ahead outlook out. Nothing's changed. I think this is all part of the process. And so what we mean by that is that, you know, we had so many different crosscurrents and f
I feel like a really great jumping off point would be just what I feel like is this point of tension in markets and the economy right now where we're seeing a lot of recent moves where, okay, we've seen the Fed pivot towards being more concerned about inflation at the last meeting, seeing risks, you know, tilt to the upside. We're seeing a pretty large surge in bond yields. We're seeing, you know, business optimism surge. We're seeing an increase in inflation expectations. It feels like there's a lot of these inflections that are moving higher, but then at the same time, there are some pretty
Well, we've number 1, just in a really basic answer to that question is we've looked at it in, the 10 year has basically had an inverse relationship with the, the city economic surprise index with, like, a 3 month, lead time. So, you know, to who you would say, like, today's, economic data, roughly speaking, is keying off of rates 3 months ago. And that's been kind of the way this whole cycle's worked. Right? So that's one thing that, one way I'm explaining it, I think, that the slowdown happens and shows up within about 2 to 4 months, call it 3 months, of of, of the rate move. Now how do I sq
We'll definitely get into it all in a second on those updated SCPs because they're very interesting. But I do want to get into what you talked about at the beginning there because hiding underneath that debate you had mentioned that you've been having is what you talked about at the start of the interview, which is this debate about where neutral is. Has it risen or has it not risen? So, you know, I was just looking at the SOFR curve and the terminal rate is, like, 4% now. So, you know, it's it's funny. Like, the the idea that the Fed hiking the federal funds rate can have an effect on the eco
First off, I think t
Keep exploring with a free account.
A free account preserves the short preview. Upgrade to Pro for the full transcript and episode chat.